Tax agent fined $900,000 for TASA breaches

The Federal Court has ordered a tax agent to pay a $900,000 penalty for breaches of the Tax Agent Services Act 2009 (TASA).

Peter Kolya has been ordered to pay a $150,000 penalty and his company, HP Kolya Pty Ltd, to pay a $750,000 fine - the largest penalty ever imposed for TASA breaches.

From August 2011 until August 2013, Mr Kolya and his company prepared and lodged numerous income tax returns and business activity statements, made amendments to tax returns, and charged fees for these services despite not being registered tax agents or BAS agents.

Mr Kolya and the company also contravened the TASA by advertising the provision of tax agent services.

In deciding an appropriate penalty, Justice Foster took into account the evidence submitted by the Tax Practitioners Board (TPB), which indicated that Mr Kolya:• knew that the pleaded conduct was in breach of the TAS Act;• knew that he was engaging in conduct which he had been prohibited from undertaking by various decisions of courts and tribunals;• was well aware of the likely harm his continued conduct of his business was likely to cause; and• has never shown any contrition whatsoever for the pleaded conduct and appears to have no appreciation of its seriousness.

Justice Foster said Mr Kolya’s conduct “displayed a flagrant disregard for the relevant registration requirements under the TASA”.

He stated that the case required a strong response from the court, both to deter Mr Kolya and to “make clear to others who may be minded to replicate his conduct that they should think very carefully before doing so because the penalties which will be imposed if caught will be significant”.

In response, the TPB has encouraged anyone seeking the services of a tax agent to first check that the person is registered with the TPB to provide those services.